The Dawn of Apple’s Dominance: Digital Hub Strategy, Revisited.

2:51 am, January 27th, 2010, Pete Mortensen

This is my last chance to say something before the great and terrible Steve holds his tablet aloft (and even then, rumormongers might have beaten him to the punch), so let me give you a bit of a long view perspective, something usually left out when we’re discussing whether we’ll see a 10 or 11″ LCD panel on the device.

You see, I’ve been thinking a lot about Apple and its insane run of success over the last nine years. Consider this: in 2001, Apple’s revenue was about $6.5 billion. In 2009, that revenue was $42.3 billion. Essentially, the company grew by more than 550 percent in eight years. How exactly is that possible? Was it the great products? Partly. Great leadership? Sure. Killer marketing? No question. But more than all of those combined, the secret to Apple’s success was that it defined and followed the right strategy and the right era. Steve Jobs is king of the world right now because he hit on the idea for the Digital Hub.

If you’ve never heard this term before, or its meaning has faded, take a look back at the video at the top of this piece. It’s the most important moment in the modern era of Apple. It’s not the day the iPod was announced, it’s not when the iPhone descended from the heavens, and no. Instead, it’s the day that Steve Jobs defined what computing would mean in the next decade.

It was January 9, 2001. It was the silver anniversary of Apple, and the newspapers were full of stories about the demise of the personal computer. Lots of digital devices had emerged that were tailored to single tasks that they did really well, from digital cameras to DVD players to DVRs to CD players to camcorders to PDAs. Many thought that we would replace our multi-use but often inefficient computers with a bunch of highly effective single-taskers. But not Jobs. As he made clear, the strength of a computer was its ability to control and integrate all these many digital devices. A Mac, in short, could serve as the Digital Hub that unites those disparate points in your digital life. You can see the key slide at 5:13.

At the time, most people assumed that this was a rather elaborate explanation for why Apple was launching iTunes, iDVD, and DVD and CD burners. But as the ensuing 9 years have shown, it was actually more or less a roadmap for everything Apple would do in the near future. We’ve seen software for nearly every spoke on that hub, from iPhoto to GarageBand, yes, but also hardware. The iPod knocked off both the mp3 player and the CD player on the Digital Hub map. The iPhone has displaced the Palm Pilot. The AppleTV has tried to take the place of the DVD player, though poorly. You could say that the iPod touch is fighting against the Nintendo DS and PlayStation Portable, neither of which were in the old Hub map but surely could have been had it been made a little later. One could even make the argument that the iPhone 3GS made an effort to get rid of the humble camcorder — or that its successors will.

By focusing its innovation in two areas — hubs (Macs) and spokes (software and hardware for digital lifestyles) — Apple has run the table over the last decade, and made a ton of money in the process. Up until this point, Steve’s focus had been on re-energizing the existing Apple fanbase with the iMac and other nicely designed products. But things didn’t take off until the company turned its gaze toward the ecosystem.

And what’s maybe most amazing about this is that Steve told all of his competitors that this was exactly what he intended to do. If you go back to this keynote, the entirety of the Digital Hub strategy was laid out publicly. Anyone could have executed it, but only Apple did, and the rest of the industry plays catch up.

All of which brings us to today, and the tremendous speculation about the Tablet. For the first time in nearly forever, Apple is introducing a product that doesn’t seem to fit into the Digital Hub as it has been. It seems focused on reading, web browsing, music, video, games, and probably healing the lame and the sick. Though it might be seen as a replacement for the Kindle, the e-reader market is weak enough that it would be shooting fish in a barrel, and this thing will be great because it will be new.

The longer I look at Steve’s map, all I can conclude is that it doesn’t fit on one of the spokes of the Digital Hub because it isn’t a spoke. It’s a new hub, and the first effort to replace the PC since, well, the Mac. Mark my words, this won’t be an accessory to your computer — it’ll be the new center of your digital life. Just wait until you see it can do when hooked up to your TV.

A very interesting read. Including the full article for once.

The other tablets in the rear view mirror.

Once Apple drops its detail bomb, the market will have limited time to respond. Nobody making Android tablets has an App Store full of iTunes content, nor deals to sell digital news and periodicals, nor a push messaging and personal content hosting subscription plan, nor a TV appliance, nor a TV subscription plan in progress. Android as a platform still lacks last year’s $199 iPod touch or even a real equivalent to the iPhone.

The same can be said for Nokia’s Maemo and Symbian and Microsoft’s Windows Mobile and RIMs BlackBerry and Palm’s WebOS and Samsung’s Bada. And none of these, save Microsoft, have a viable desktop PC platform with development tools that scale from the conventional desktop to smartphones to tablets-form-factor devices. Conversely, Microsoft doesn’t have a successful MP3 player, nor a successful smartphone platform, nor a desirable tablet, nor even a content and software marketplace with any significance.

That should clarify how quickly Apple’s rivals will manage to catch up to its new Tablet. Given the weak competition Apple faced against the iPod and the laughable efforts that leading mobile companies have ineffectually thrown under the wheels of the iPhone, it’s hard to imagine that Apple’s Tablet won’t similarly define the future of tablet devices while maintaining a strong lead for the foreseeable future.

About Apple launching a Multitouch Tablet and killing the rest of the Tablet market even before it is born.

Another former Apple executive who was there at the time said the tablets kept getting shelved at Apple because Mr. Jobs, whose incisive critiques are often memorable, asked, in essence, what they were good for besides surfing the Web in the bathroom.

I have a thousand questions about The Tablet’s design. What size is it? There’s a big difference between, say, 7- and 10-inch displays. How do you type on it? With all your fingers, like a laptop keyboard? Or like an iPhone, with only your thumbs? If you’re supposed to watch video on it, how do you prop it up? Holding it in your hands? Flat on a table seems like the wrong angle entirely; but a fold-out “arm” to prop it up, à la a picture frame, seems clumsy and inelegant. If it’s just a touchscreen tablet, how do you protect the screen while carrying it around? If it folds up somehow, how is it not just a laptop — why not put a hardware keyboard on the part that folds up to cover the display? (Everyone I know at Apple refers to it as “The Tablet”, but so far as I can tell, that’s because that’s what everyone calls it, not because anyone knows that it actually even is, physically, a tablet. And “The Tablet” most certainly is not the product name.) If it’s too big to fit in a pants pocket, how are you supposed to carry it around? And but if it does fit in a pants pocket, how is it bigger enough than an iPod Touch to justify existing? And so on.

But there’s one question at the top of the list, the answer to which is the key to answering every other question. That question is this: If you already have an iPhone and a MacBook; why would you want this?

A good article with interesting insights about the rumored Apple Tablet. Most important of all it echoes my question "If I already have an iPhone and a MacBook; why would I want this?"

Hit the links to read the full article. Very Recommended.